Covanta shares seen growing for years -Barron's

Published November 03, 2013

| Reuters

advertisement

U.S. waste management and energy company Covanta Inc is likely to keep growing for years because most of its revenue is secured by long-term contracts and barriers to entry in the waste-to-energy business are high, according to an article in Barron's on Sunday.

Covanta's stock has tumbled 15 percent since management lowered it guidance for the year in its October 23 third-quarter earnings report, the article said, noting "this looks like a buying opportunity."

In two to three years, Barron's said, the shares could reach the mid $20s, up at least 40 percent from a recent $17.35.

Covanta operates 45 facilities that convert garbage into energy, making money from the waste it collects and the electricity and steam it produces, the article said.

U.S. regulations have prevented new construction of waste-to-energy facilities since the 1990s, the article said.